BANDA VS ERMITA GR NO.

16662 APRIL 20, 2010

April Joy F. Boreres

FACTS:

The petitioners filed this action as a class suit on their own behalf and on behalf of all their co-
employees at the National Printing Office. They challenge the constitutionality of Executive Order
No. 378 issued by President Gloria Macapagal Arroyo which amended Sec. 6 of Executive Order
No. 285, removing the exclusive jurisdiction of the NPO over the printing services requirements
of government agencies and instrumentalities. They perceive it as a threat to their security of
tenure as employees of the NPO contending that it is beyong the executive powers of Pres. Arroyo
to amend or repeal EO No. 285 issued by former Pres. Aquino when the latter still exercised
legislative powers and that EO No. 378 violates petioners’ security of tenure because it paves the
way for the gradual abolition of the NPO.

ISSUE:

Whether or not Pres. Arroyo can amend or repeal EO No. 285 by the mere issuance of
another executive order.

RULING:

It is a well-settled principle in jurisprudence that the President has the power to reorganize
the offices and agencies in the executive department in line with the President’s constitutionally
granted power of control over executive offices and by virtue of previous delegation of the
legislative power to reorganize executive offices under existing statutes.

It is undisputed that the NPO, as an agency that is part of the Office of the Press Secretary
(which in various times has been an agency directly attached to the Office of the Press Secretary
or as an agency under the Philippine Information Agency), is part of the Office of the President.

Pertinent to the case at bar, Section 31 of the Administrative Code of 1987 authorizes
the President (a) to restructure the internal organization of the Office of the President Proper,
including the immediate Offices, the President Special Assistants/Advisers System and the
Common Staff Support System, by abolishing, consolidating or merging units thereof or
transferring functions from one unit to another, and (b) to transfer functions or offices from the
Office of the President to any other Department or Agency in the Executive Branch, and vice
versa.

In the case at bar, there was neither an abolition of the NPO nor a removal of any of its
functions to be transferred to another agency. Under the assailed Executive Order No. 378, the
NPO remains the main printing arm of the government for all kinds of government forms and
publications but in the interest of greater economy and encouraging efficiency and profitability, it
must now compete with the private sector for certain government printing jobs, with the exception
of election paraphernalia which remains the exclusive responsibility of the NPO, together with the
Bangko Sentral ng Pilipinas, as the Commission on Elections may determine. At most, there was
a mere alteration of the main function of the NPO by limiting the exclusivity of its printing
responsibility to election forms.
 Pursuant to Section 20, Chapter 7, Title I, Book III of the same Code, the power of the
President to reorganize the Executive Branch under Section 31 includes such powers and
functions that may be provided for under other laws. To be sure, an inclusive and broad
interpretation of the President’s power to reorganize executive offices has been consistently
supported by specific provisions in general appropriations laws.

Section 48 of R.A. 7645 provides that the acts of "scaling down, phasing out and
abolition" of offices only and does not cover the creation of offices or transfer of functions.
Nevertheless, the act of creating and decentralizing is included in the subsequent provision of
Section 62 which evidently shows that the President is authorized to effect organizational
changes including the creation of offices in the department or agency concerned.

Notably, in the present case, the 2003 General Appropriations Act, which was reenacted
in 2004 (the year of the issuance of Executive Order No. 378), likewise gave the President the
authority to effect a wide variety of organizational changes in any department or agency in the
Executive Branch. Sections 77 and 78 of said Act recognize the power of the President to
reorganize even executive offices already funded by the said appropriations act, including the
power to implement structural, functional, and operational adjustments in the executive
bureaucracy and, in so doing, modify or realign appropriations of funds as may be necessary
under such reorganization. Thus, insofar as petitioners protest the limitation of the NPO’s
appropriations to its own income under Executive Order No. 378, the same is statutorily
authorized by the above provisions.

In the present instance, involving neither an abolition nor transfer of offices, the assailed
action is a mere reorganization under the general provisions of the law consisting mainly of
streamlining the NTA in the interest of simplicity, economy and efficiency. It is an act well within
the authority of the President motivated and carried out, according to the findings of the appellate
court, in good faith, a factual assessment that this Court could only but accept.

In the more recent case of Tondo Medical Center Employees Association v. Court of
Appeal which involved a structural and functional reorganization of the Department of Health
under an executive order, we reiterated the principle that the power of the President to reorganize
agencies under the executive department by executive or administrative order is constitutionally
and statutorily recognized. This Court has already ruled in a number of cases that the President
may, by executive or administrative order, direct the reorganization of government entities under
the Executive Department. This is also sanctioned under the Constitution, as well as other
statutes.

Section 17, Article VII of the 1987 Constitution, clearly states: The president shall have
control of all executive departments, bureaus and offices. Section 31, Book III, Chapter
10 of Executive Order No. 292, also known as the Administrative Code of 1987, the
President, subject to the policy in the Executive Office and in order to achieve simplicity,
economy and efficiency, shall have continuing authority to reorganize the administrative
structure of the Office of the President.

In Domingo v. Zamora [445 Phil. 7 (2003)], this Court explained the rationale behind the
Presidents continuing authority under the Administrative Code to reorganize the administrative
structure of the Office of the President. The law grants the President the power to reorganize
the Office of the President in recognition of the recurring need of every President to
reorganize his or her office to achieve simplicity, economy and efficiency.
 Sec. 23, Chapter 8, Title II of the Administrative Code. The Agencies under the Office of
the President.The agencies under the Office of the President refer to those offices placed
under the chairmanship of the President, those under the supervision and control of
the President, those under the administrative supervision of the Office of the President,
those attached to it for policy and program coordination, and those that are not placed by
law or order creating them under any specific department.

The power of the President to reorganize the executive department is likewise recognized
in general appropriations laws. x x x.

xxxx

Clearly, Executive Order No. 102 is well within the constitutional power of the
President to issue. The President did not usurp any legislative prerogative in
issuing Executive Order No. 102. It is an exercise of the Presidents
constitutional power of control over the executive department, supported by
the provisions of the Administrative Code, recognized by other statutes, and
consistently affirmed by this Court.

In Anak Mindanao Party-List Group v. Executive Secretary that:

The Constitutions express grant of the power of control in the President

justifies an executive action to carry out reorganization measures under a
broad authority of law.

In enacting a statute, the legislature is presumed to have deliberated with full

knowledge of all existing laws and jurisprudence on the subject. It is thus reasonable to
conclude that in passing a statute which places an agency under the Office of the President,
it was in accordance with existing laws and jurisprudence on the Presidents power to
reorganize.

In establishing an executive department, bureau or office, the legislature necessarily ordains an

executive agencys position in the scheme of administrative structure. Such determination is
primary, but subject to the Presidents continuing authority to reorganize the administrative
structure. As far as bureaus, agencies or offices in the executive department are concerned, the
power of control may justify the President to deactivate the functions of a particular office. Or a
law may expressly grant the President the broad authority to carry out reorganization measures.

Reorganizations in this jurisdiction have been regarded as valid provided they are pursued
in good faith. As a general rule, a reorganization is carried out in "good faith" if it is for the purpose
of economy or to make bureaucracy more efficient. In that event, no dismissal (in case of a
dismissal) or separation actually occurs because the position itself ceases to exist. And in that
case, security of tenure would not be a Chinese wall. Be that as it may, if the "abolition," which is
nothing else but a separation or removal, is done for political reasons or purposely to defeat
security of tenure, or otherwise not in good faith, no valid "abolition" takes place and whatever
"abolition" is done, is void ab initio. There is an invalid "abolition" as where there is merely a
change of nomenclature of positions, or where claims of economy are belied by the existence of
ample funds.

In sum, the Court finds that the petition failed to show any constitutional infirmity or grave
abuse of discretion amounting to lack or excess of jurisdiction in President Arroyo’s issuance of
Executive Order No. 378.

WHEREFORE, the petition is hereby DISMISSED and the prayer for a Temporary Restraining
Order and/or a Writ of Preliminary Injunction is hereby DENIED. No costs.